Marks PT's return to business in Brazil

Reuters

January 6, 2011

Marks PT's return to business in Brazil

Reuters

Portugal Telecom (Lisbon, Portugal) said today it had signed the necessary contracts to seal the purchase of a 22.38 percent direct and indirect stake in Brazil's main fixed-line phone carrier Oi (Rio de Janeiro) for 8.32 billion reais ($4.98 billion). The deal, drafted last July, effectively means the return of Portugal Telecom as a major player to fast-growing Brazil after it sold its stake in Brazil's top mobile firm Vivo to Spain's Telefonica for 7.5 billion euros last year.

"PT informs that it has signed the definitive sales and purchase, subscription and shareholders agreements with Oi and its controlling shareholders ... The Oi transaction is expected to close up to the end of March 2011," PT said in a statement.

Under the terms of the deal, the Portuguese operator gains control of 12.07 percent of Telemar Participacoes, part of Oi's business, as well 35 percent stakes in the AG and LF units.

The deal also involves a capital increase of up to 12 billion reais by Oi units TNL and TMAR each. PT is yet to determine the size of stakes it will take in these two units.

PT also said that Oi -- Brazil's largest fixed-line phone company -- intended to take a stake of up to 10 percent in the Portuguese company.

The parties have also agreed on the rearrangement of CTX -- the controlling entity of contact centre Contax -- and the merger of Contax with Portugal Telecom's Dedic/GPTI call center and business outsourcing operation, to create synergies for shareholders, PT said.